Tackling inflation in sector bargaining

Europe

The Eurofound research agency has published a new analysis of trends in sector collective bargaining as negotiators respond to the challenge of rising inflation. It found that collectively negotiated wages in 2022 did not reflect the rising cost of living, resulting in further purchasing power losses for employees. The study focused on four sectors – chemical and pharmaceutical, metalworking, and hospitality and domestic work – in France, Germany and Italy where wages have mostly been growing slower than inflation. It notes the positive impact of increases in statutory minimum wages, contributing to a positive distributional impact by narrowing the wage structure in collective wage agreements. Eurofound also says that new drivers such as labour and skills shortages may significantly influence sectoral collective bargaining. The study points out that even though governments have launched extensive relief packages aimed at cushioning the impact of inflation on households, families and on sectors, hardly any specific measures have influenced collective wage negotiations, except for the inflation allowance in Germany.

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